APR, interest rates and fees explained.

It’s easy to be confused by the different interest rates and fees that can be charged to your credit card account. Below, we’ve listed the terms you’re likely to see and explained what these rates and fees mean for you.

APR

APR is how much it’s likely to cost you to borrow money over one year. You'll see it as a percentage.  

It’s not just about the interest you’ll pay. APR factors in both interest and any fees that are automatically charged to your account. This gives you a good idea of the overall cost and is useful if you’re comparing credit cards.  

APR stands for annual percentage rate.

Credit card interest rates

Interest is the cost of borrowing money. The amount of interest you’ll pay is worked out as a percentage of the money you borrow – this percentage is called an interest rate.

Interest rates can vary depending on how you use your credit card. There are four types:

  • Purchase rate
    The interest you’ll be charged when you use your credit card to buy things. Normally you’ll have an interest-free period of up to 56 days if you pay the balance in full by the due date. Otherwise, interest is charged from the transaction date.
  • Balance transfer rate
    The interest you’ll be charged when you move the balance from one credit card or store card to another credit card. Find out more about balance transfers
  • Money transfer rate
    The interest you’ll be charged when you move money from your credit card to any of your UK current accounts. Find out more about money transfers
  • Cash transaction rate
    The interest you’ll be charged for cash transactions. These include: withdrawing cash from a cash machine,; buying non-sterling currency; and gambling. Interest on cash is always charged from the date of the transaction.

Promotional rates

A promotional rate is a low or 0% interest rate offered for a set period of time. When this period ends, the standard rate will take its place. Promotional rates can be offered on balance transfers, money transfers and purchases. These offers can save you money, but look for what suits you and check if fees apply. For example, you may still get charged a fee for a balance transfer that has a 0% interest rate.

Credit card fees

Fees are charged to your credit card as either a percentage of a transaction or as a default charge of £12. Here are the most common types of fee you’ll see on Halifax cards:

Transaction fees

  • Balance transfer fee
    This is the fee you’ll be charged when you move the balance from one credit or store card to another credit card. Find out more about balance transfers
  • Money transfer fee
    This is the fee you’ll be charged when you move money from your credit card to any of your UK current accounts. Find out more about money transfers
  • Cash advance fee
    You can be charged for withdrawing cash from a cash machine using your credit card.
  • Card processing fee
    Some companies charge a fee for using your card for gambling transactions, buying postal orders or entering competitions.
  • Using your card abroad
    You may be charged additional fees and interest for making non-sterling transactions or buying non-sterling currency. Find out more about using your card abroad

Default charges

  • Overlimit fee
    Your credit limit is the maximum amount of money you can borrow on your account. If you go over this limit, you may be charged.
  • Late payment fee
    You may be charged if you do not make your minimum payment by the due date on your statement.

Have you had a default charge?
If you’ve missed a payment or gone over your credit limit, there are steps you can take to get back in control.

Read our top tips for managing your credit card


Money worries? We’re here to help

If you’re struggling to make your credit card payments, please let us know.

Our trained advisers can give you guidance on paying off your credit card debt. We can talk to you about payment options and we may be able to offer a more affordable plan based on your personal circumstances.

Get in touch:


Making sure you get a fair deal

We want you to find a product that's right for your circumstances, which is why we adhere to the Standards of Lending Practice, which are monitored and enforced by the Lending Standards Board

To find out more you can read the statement of responsibilities, which details what's expected of us, the lender and you the borrower.


Halifax is a division of Bank of Scotland plc.  Registered in Scotland no. SC327000.  Registered Office: The Mound, Edinburgh EH1 1YZ. 

Bank of Scotland plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number 169628.